Question 1

Under the UCC,title passes to the buyer when the seller has physically delivered the goods.

Accepted Answer

A) True 
 B)False

Question 2

Under the UCC,________ means that a buyer has given any consideration sufficient to support a simple contract.

Accepted Answer

A) bona fide 
B) pure 
C) good faith 
D) value 
A) bona fide 
B) pure 
C) good faith 
D) value

Question 3

A music store lets Laura take a guitar home with her so that Laura can test how it plays.After playing the guitar for a day,Laura puts it on her sofa and forgets about it.Two weeks later,the guitar is damaged due to a fire.Who must bear the risk of loss for the damage to the guitar?

Accepted Answer

Laura bears the risk of loss.This is a s

Question 4

In a case where a merchant mistakenly sells a good that was entrusted to it,under what theory can the entruster sue for damages?

Accepted Answer

A) Trespass to chattels 
B) Conversion 
C) Theft 
D) Breach of contract 
A) Trespass to chattels 
B) Conversion 
C) Theft 
D) Breach of contract

Question 5

To qualify as a buyer in the ordinary course of business,the buyer must transact in good faith and without knowledge that the transaction may violate the ownership rights of a third party.

Accepted Answer

A) True 
 B)False

Question 6

Sean goes to Pinnacle Corp. ,convinces the store manager that he is their loyal online customer Ryan and purchases a DVD credited to Ryan's account.He then sells the DVD to Jason for a higher price.When Ryan finds out,he wants the DVD back from Jason.Which of the following is true of the case?

Accepted Answer

A) Ryan is a good faith purchaser. 
B) Pinnacle can get the DVD from Jason. 
C) Sean has voidable title to the DVD. 
D) Jason needs to pay Sean and Pinnacle. 
A) Ryan is a good faith purchaser. 
B) Pinnacle can get the DVD from Jason. 
C) Sean has voidable title to the DVD. 
D) Jason needs to pay Sean and Pinnacle.

Question 7

The importance of the terms FOB and FAS in contracts for the sale of goods is that they obligate the buyer to pay immediately upon delivery of the goods.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following does the UCC define as "honesty in fact in the conduct or transaction concerned?"

Accepted Answer

A) Good faith 
B) Value 
C) Bona fide 
D) Pure 
A) Good faith 
B) Value 
C) Bona fide 
D) Pure

Question 9

Stone,a merchant seller in Seattle,contracted with Rose,a merchant buyer in Rochester,for the sale of goods to be shipped by truck.The terms of the contract were "F.O.B.Seattle." Stone delivered the goods to the carrier.After leaving Seattle,the truck containing the goods was never seen again.Stone has demanded payment for the goods,and Rose has refused.If Stone sues,the outcome will be:

Accepted Answer

A) Rose will win because Rose did not receive the goods. 
B) Rose will win because under the UCC,this was a shipment contract. 
C) Stone will win because Stone was not at fault in causing the loss. 
D) Stone will win because under the UCC,this was a shipment contract. 
A) Rose will win because Rose did not receive the goods. 
B) Rose will win because under the UCC,this was a shipment contract. 
C) Stone will win because Stone was not at fault in causing the loss. 
D) Stone will win because under the UCC,this was a shipment contract.

Question 10

Toby and Roy are car dealers.Toby makes a deal with Roy to sell a 1978 Buick.However,they failed to reach any agreement as to the price of the car and decided to leave the matter to be decided once Toby delivers the car.Which of the following is true about this deal?

Accepted Answer

A) According to the Code,a reasonable price will be put on delivery. 
B) According to the common law,this contract is definite and legal. 
C) According to the common law,Roy can sue Toby. 
D) According to the Code,it is an illegal contract due to absence of intent. 
A) According to the Code,a reasonable price will be put on delivery. 
B) According to the common law,this contract is definite and legal. 
C) According to the common law,Roy can sue Toby. 
D) According to the Code,it is an illegal contract due to absence of intent.

Question 11

UCC 9-307 states that a buyer who purchases a good in a normal type transaction is a good faith purchaser and owns the good free and clear of previous security liens on goods.

Accepted Answer

A) True 
 B)False

Question 12

Tony enters into a contract with Joseph to supply his entire output of guavas from each season at the then current market price.Joseph plans to use the guavas to make jams.However,the contract did not contain any clause as to when it can be terminated.Tony gave a one-year notice period to Joseph prior to termination of the contract.Joseph intentionally did not make any arrangements for himself to acquire guavas from elsewhere.When Tony expressed his inability to supply Joseph the guavas after one year,Joseph sued Tony for breach of contract.Is Joseph's approach justified?

Accepted Answer

No,Joseph's approach is not justified.Th

Question 13

Maple Interiors,located in Boston,contracted to sell and ship sofas to Peach Furniture,located in Atlanta.The contract stated that the goods were to be shipped "F.O.B.Boston,via XYZ railroad." Maple delivered the sofas to XYZ railroad.They were shipped from Boston but never seen again.Both Peach and Maple assumed that the other party had the risk of loss,so neither had obtained insurance.Who must bear this loss?

Accepted Answer

A) Peach must bear the loss because the risk passed to it after the sofas were placed on the loading dock at Maple's warehouse. 
B) Peach must bear the loss because the risk passed to it after the sofas were delivered to XYZ railroad. 
C) Maple must bear the loss because the goods were never tendered to Peach. 
D) Maple must bear the loss because in any sale by a merchant,risk does not pass until the actual delivery of the goods to the buyer. 
A) Peach must bear the loss because the risk passed to it after the sofas were placed on the loading dock at Maple's warehouse. 
B) Peach must bear the loss because the risk passed to it after the sofas were delivered to XYZ railroad. 
C) Maple must bear the loss because the goods were never tendered to Peach. 
D) Maple must bear the loss because in any sale by a merchant,risk does not pass until the actual delivery of the goods to the buyer.

Question 14

Which section of the UCC defines what a merchant is?

Accepted Answer

A) 2-104(1) 
B) 2-302 
C) 2-305(2) 
D) 2-306 
A) 2-104(1) 
B) 2-302 
C) 2-305(2) 
D) 2-306

Question 15

Which section of the UCC states that title passes to the buyer when seller has completed physical delivery of the goods?

Accepted Answer

A) 2-401 
B) 2-305 
C) 2-307 
D) 2-201 
A) 2-401 
B) 2-305 
C) 2-307 
D) 2-201

Question 16

The law of sale of goods codified in the Article 2 of the UCC is modified to accommodate current practices of merchants.

Accepted Answer

A) True 
 B)False

Question 17

When a contract contains a(n)________ clause,the courts have the right to refuse to enforce the unconscionable clause or contract.

Accepted Answer

A) arbitrary 
B) unreasonable 
C) unfair 
D) discriminatory 
A) arbitrary 
B) unreasonable 
C) unfair 
D) discriminatory

Question 18

If the seller contracts to deliver goods to a certain destination and the contract says "Ex-ship," the seller bears the risk of loss until it delivers the goods to a shipper.

Accepted Answer

A) True 
 B)False

Question 19

In a ________ contract,the goods are delivered to the buyer primarily for resale with the understanding that the buyer has the right to return them.

Accepted Answer

A) sales 
B) buy and sell 
C) sale or return 
D) supply of goods 
A) sales 
B) buy and sell 
C) sale or return 
D) supply of goods

Question 20

Which of the following is most likely to be considered a sale of goods to which the UCC applies?

Accepted Answer

A) A dentist places a crown over a patient's tooth. 
B) A gas station sells a new battery for a car. 
C) A hairstylist uses a crème rinse in styling a client's hair. 
D) A spinal readjustment from a chiropractor. 
A) A dentist places a crown over a patient's tooth. 
B) A gas station sells a new battery for a car. 
C) A hairstylist uses a crème rinse in styling a client's hair. 
D) A spinal readjustment from a chiropractor.

Exam 19: Formation and Terms of Sales Contracts

Under the UCC,title passes to the buyer when the seller has physically delivered the goods.

Under the UCC,________ means that a buyer has given any consideration sufficient to support a simple contract.

A music store lets Laura take a guitar home with her so that Laura can test how it plays.After playing the guitar for a day,Laura puts it on her sofa and forgets about it.Two weeks later,the guitar is damaged due to a fire.Who must bear the risk of loss for the damage to the guitar?

In a case where a merchant mistakenly sells a good that was entrusted to it,under what theory can the entruster sue for damages?

To qualify as a buyer in the ordinary course of business,the buyer must transact in good faith and without knowledge that the transaction may violate the ownership rights of a third party.

Sean goes to Pinnacle Corp. ,convinces the store manager that he is their loyal online customer Ryan and purchases a DVD credited to Ryan's account.He then sells the DVD to Jason for a higher price.When Ryan finds out,he wants the DVD back from Jason.Which of the following is true of the case?

The importance of the terms FOB and FAS in contracts for the sale of goods is that they obligate the buyer to pay immediately upon delivery of the goods.

Which of the following does the UCC define as "honesty in fact in the conduct or transaction concerned?"

Toby and Roy are car dealers.Toby makes a deal with Roy to sell a 1978 Buick.However,they failed to reach any agreement as to the price of the car and decided to leave the matter to be decided once Toby delivers the car.Which of the following is true about this deal?

UCC 9-307 states that a buyer who purchases a good in a normal type transaction is a good faith purchaser and owns the good free and clear of previous security liens on goods.

Which section of the UCC defines what a merchant is?

Which section of the UCC states that title passes to the buyer when seller has completed physical delivery of the goods?

The law of sale of goods codified in the Article 2 of the UCC is modified to accommodate current practices of merchants.

When a contract contains a(n)________ clause,the courts have the right to refuse to enforce the unconscionable clause or contract.

If the seller contracts to deliver goods to a certain destination and the contract says "Ex-ship," the seller bears the risk of loss until it delivers the goods to a shipper.

In a ________ contract,the goods are delivered to the buyer primarily for resale with the understanding that the buyer has the right to return them.

Which of the following is most likely to be considered a sale of goods to which the UCC applies?

The Nature of Law

The Resolution of Private Disputes

Business and the Constitution

Business Ethics, Corporate Social Responsibility, Corporate Governance, and Critical Thinking

Criminal Law and Procedure

Intentional Torts

Negligence and Strict Liability

Intellectual Property and Unfair Competition

Introduction to Contracts

The Agreement: Offer

The Agreement: Acceptance

Consideration

Reality of Consent

Capacity to Contract

Illegality

Writing

Rights of Third Parties

Performance and Remedies

Product Liability

Performance of Sales Contracts

Remedies for Breach of Sales Contracts

Personal Property and Bailments

Real Property

Landlord and Tenant

Estates and Trusts

Insurance Law

Introduction to Credit and Secured Transactions

Security Interests in Personal Property

Bankruptcy

Negotiable Instruments

Negotiation and Holder in Due Course

Liability of Parties

Checks and Electronic Transfers

The Agency Relationship

Third-Party Relations of the Principal and the Agent

Introduction to Forms of Business and Formation of Partnerships

Operation of Partnerships and Related Forms

Partners Dissociation and Partnerships Dissolution and Winding up

Limited Liability Companies, limited Partnerships, and Limited Liability Limited Partnerships

History and Nature of Corporations

Organization and Financial Structure of Corporations

Management of Corporations

Shareholders Rights and Liabilities

Securities Regulation

Legal and Professional Responsibilities of Auditors, Consultants, and Securities Professionals

Administrative Law

The Federal Trade Commission Act and Consumer Protection Laws

Antitrust: the Sherman Act

The Clayton Act, the Robinsonpatman Act, and Antitrust Exemptions and Immunities

Employment Law

Environmental Regulation

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